National Association of Home Builders Discusses Economics and Housing Policy

A Cross-Country Comparison of Homeownership Rates

In the United States, the majority of households own their home. NAHB analysis of international data indicates that the same is true across the European Union (EU). The vast majority of European households own their home as well. However, the incidence of homeownership across the EU is typically greater than the homeownership rate in the United States.

The rate of homeownership across Europe is strongly correlated with the share of homeowners without a mortgage or a housing loan. European countries with higher rates of homeownership also have greater shares of homeowners without a housing loan or a mortgage. In contrast, countries with lower rates of homeownership tend to have higher rates of homeowners carrying a housing loan or mortgage.

According to data compiled by the European Mortgage Federation from Eurostat, supplemented by more recent data from Eurostat, the majority of European countries, the 28 countries in the European Union, have owner-occupancy rates that exceed the homeownership rate in the United States. The owner-occupied rate is proportion of all dwellings, owner- or renter-occupied that are owner-occupied. Eurostat is a branch of the European Commission tasked with providing statistical information to seven principal bodies of the European Union. These seven bodies are the European Parliament, the European Council, the Council of the European Union, the European Commission, the Court of Justice of the European Union, the European Central Bank, and the Court of Auditors. Eurostat is also responsible for promoting harmonization of statistical methods across its member countries, candidate countries for accession, and countries that are members of the European Free Trade Association.

As shown in Figure 1 above, in 2013, the last year of complete data, only 5 countries across the European Union, the United Kingdom, France, Denmark, Austria, and Germany had owner-occupancy rates below the 65% homeownership rate in the United States. The 2013 owner-occupancy rate in the United Kingdom was rounded from 64.6%, 0.5 percentage points less than the 65.1% homeownership rate in the United States. Meanwhile, the other 23 countries had owner-occupancy rates that exceeded the US homeownership rate. At the high end, Romania, Lithuania, Slovakia, and Hungary had owner-occupancy rates greater than or equal to 90%, while 7 countries had owner-occupancy rates between 80% and 89% and 11 countries had owner-occupancy rates between 70% and 79%. The owner-occupancy rate in the Netherlands was 67%.

The level of homeownership in countries across Europe is correlated with the share of homeowners that do not have outstanding housing-related debt. European countries where the largest proportion of households are homeowners tend to also be countries where the majority of homeowners do not have outstanding housing debt. In contrast, countries with comparatively lower homeownership rates tend to also be countries where a greater share of homeowners have outstanding housing debt.

According to Figure 2, the homeownership rate in Romania was 96% in 2013 and 99% of homeowners did not have outstanding housing debt. Meanwhile, in the Netherlands, 67% of households are considered homeowners, but only 11% of these homeowners do not have housing debt. The other 89% of homeowners have a mortgage. The 2013 homeownership rate was 65.1% in the United States. The proportion of owner-occupied homes that did not have a mortgage, obtained from the 2013 American Housing Survey, was 36%.

Thank you very much for the very helpful comparison. Unfortunately, does the article not continue with the finding “…countries with lower rates of homeownership tend to have higher rates of homeowners carrying a housing loan or mortgage.” How can it be explained? Does it imply necessarily that the cost of property in countries with lower homeownership is too high, whereby a mortgage is needed? How about the percentages of mortgage-financed homes that have fully paid back their loan?